Non-compliant employers face regulatory, capital, and talent retention challenges.
All employers in Ireland have ESG (environment, social and
governance) obligations but only 17% know what these obligations
are and have no concerns about implementing them. That's
according to The Employer's Guide to ESG which surveyed over
400 employers and over 1,000 employees in Ireland.
The percentage of Irish employers surveyed who have implemented
specific employment policies:
- 20% - Whistleblowing / Speak-up Policy
- 26% - Remote Working Policy / Hybrid Working Policy
- 12% - Right to Disconnect Policy
- 34% - Mental Health and Wellness Policy
- 31% - None of these
Commenting on the report, Catherine O'Flynn, Head of the
William Fry's Employment & Benefits team, said: "Our
survey shows that 77% of employers surveyed believe that they are
compliant with all current employment legislation. However, only
20% have a whistleblowing policy and 12% have a right to disconnect
policy. Employers who fail to comply with new legislation and new
standards will not only face employment law risks but will also
have difficulty in accessing capital markets, be at a risk
reputationally, and be at a disadvantage when it comes to
recruiting and retaining key talent".
The Employer's Guide to ESG includes employee views on the most
important ESG policies. The top priority of those surveyed is to
have a hybrid and flexible working policy, with only the 25 - 34
year olds indicating that fully remote working is a high priority.
25 - 34 year olds prioritised training and development the least
while the over 50s prioritise gender pay gap reporting the least,
out of all of the age groups. Interestingly, strong diversity and
inclusion practices were ranked as the second least important
policy to 25 - 34 year olds, just ahead of paid volunteering
time.
The top ESG policy priorities of the 1000 employees surveyed:
- 38% Hybrid/Flexible Working Options
- 18% Health Insurance
- 11% Training and Development
- 11% Fully Remote Work
- 6% Dignity at Work
ESG is not a new concept, but until recently businesses focused
primarily on the environmental aspect. This focus is now expanding
to the social aspect and, at the EU's request, the Social
Taxonomy Report was published in February 2022. The Commission
proposes to use this report to establish a classification system to
measure an employer's 'social' credentials. In the
future, impacted employers will likely be required to collect,
measure and report on various measurables to ascertain whether
certain standards have been met and, in turn, whether such an
employer is deemed to be 'social' or not.
The Employer's Guide to ESG also notes that more and more Irish
employers will link executive remuneration to ESG metrics. 71% of
employees in the survey agreed that senior management bonuses
should, or possibly should, be linked to their employer achieving
its ESG social targets, including reducing the gender pay gap and
improving equal opportunities.
Catherine O'Flynn adds a caution to employers: "Our survey
found that 37% of employers are not focused on the increasing
number of ESG obligations because they do not feel it is relevant
to their organisation. However, all employment legislation comes
within the remit of ESG so is in fact relevant to all employers.
Employees' rights are increasingly protected by legislative
developments and are further enhanced by the social component of
ESG. It is difficult to defend employment claims if an employer is
not compliant with legislation and relevant Codes of Practice and,
at a minimum, employers need to comply with current legal
obligations. However, employers who want to be ESG compliant should
ensure that their policies reflect all existing legislation and
that they are prepared to adopt and comply with new legislation as
soon as it becomes effective, if not before."
Click here to read The Employer's Guide to ESG
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